Lessons From the London Whale Report

1/16/2013 11:18AM

A report on J.P. Morgan's London Whale debacle, which cost the firm billions in losses and resulted in the slashing of CEO Jamie Dimon's salary, is out with some damning findings. Can a London Whale happen again? David Benoit joins Markets Hub. Photo: AP.

This transcript has been automatically generated and may not be 100% accurate.

... I ... J P Morgan CEO Jamie diamonds while a little bit later this morning that it ... will be just fine ... we are still unbelievably still talking about the London whale because not only did Jamie diamonds will will ... that the task force the internal task force ... reach their conclusions they released a report this morning ... a little look at here to stay ... as chief executive officer Mr Diamond's appropriately relied on senior managers who directed and written report to him to escalate significant issues and concerns ... however ... he could have been attested his reliance ... on what he was told that is one of the conclusions ... of the taskforce morning welcome to the markets of everybody ... I'm Paul vignette talk about all that ... day Benoit Deal Journal blogger is on here ... so I guess that the one thing is Jamie diamonds salary cut right yes I estimate the diamond is cut in half from last year ... I'm still makes eleven million dollars as it has become and is still not ... a nice nice not to bring home right on that specifically was cut because of the London really Exec Lee and so the esoteric have to report him and said the Internal castle for ... task ... force report which is ... the guys that were sent invited banks to clean up this disaster ... since been promoted to to to really top positions in ... and then there's a board report come in analyzing the board's actions and diamonds actions ... in May ... don't let him off the hook is not is not really basses much sex a couple other executives get to news reports from above ... but his pace and have been easy yet as as you read ... on if ... he could of done better as he was a cinch ... of course the last six billion dollars debt ... so what else did you learn today from us by so with a broad and so kind of in the in the taskforce conclusions which have kind of Ben and Jamie Dunn is Khona type vocals total billings testified about it ... is ... a sensitive takeaway is ... one in this group the Chief Investment Office ... predicted the Chief Investment Officer minded room with no one at her home until June and was in awe as an owner is going to resign shortly after this ... they don't they use the word failed multiple times I've ... costs explained how I just add oversight will be the Schermer diamond cut of his depended on danger even since July has been ... no backing ... but that the reports pretty stark language firmer ... and also to CFO ... Doug Braunstein is no longer CFO named chief risk officer Barry zero is also no longer chief risk officer so ... really the report ... laid the blame at the foot of the top management of the biggest bank in a country for for this ... I mean what his bullish over the job like that ... these things here responsibility ... um what else did we learn from this report what sort of internal processes to him is located in the right for a while and I'd like to launch the right ... we didn't have proper risk management control set in place ... someone is resonated admit this ... the CIO ... was was Khona soaring its balance sheet is ... getting bigger and bigger and bigger ... in the bank didn't really look at that didn't really take into account that while setting its risk ... object is and ... kind of ... making sure it was under control so kind of ... it seems like a ... pretty big oversight Barron's playing this ... as one ... entity grow at a controlled know ... your member was wildly profitable so that's what happened ... aam ... we also have learned ... actually I think ... kind of interest when one of the twenty oh is is they don't actually think compensation ... impact of that that this much ... they say ... essentially if the traders that were doing this position them are hiding their losses ... were told on about front was in Uganda why nonexistent the will impact your pay that much are so be paid fairly ... mini me New would've done better but that ... they don't believe competition is the driving force behind to win his heat and the reporter earnings and earnings were no better than expected but admits that gas stocks down on she arrived and I might want ... to do a awesome you know that the question is ... and and ... Jamie diming famously won his first broke all the tempest teapot ... do you think that JPMorgan specifically maybe even the broader Street he can be learned anything from this or is this the Cunniff Inn with is what happens ... a week Arizona they're making money when to start making money then it's alr of risk management and we miss this of this that ... didn't learn anything crying I mean ... I think I think that in the morning did learn some things I think there's hundred and thirty page report sets out ... hey we should be doing this better be right ... profits made all of you not hide all concerned things get hairy ... aam ... so we'll see and I think it's certainly possible to happen again I don't know if I'm beginning ... to Morgan Morgan right ... for Thompson at the Capri watchful for this right now that you hope Arike Tim and I think very much in a gal I work to do the task of earnings reports everything ... has a few minutes ...